Scottish Court of Session Decisions

Lieutenant Walker, was in the East India Company's service, and was proprietor of the estate of Clayton, in Fifeshire. His affairs in this country were under the management of his uncle by affinity, Mr W. Walker, W.S., the defender. In 1829 Lieutenant Walker executed and sent home a deed of factory and commission in favour of Mr Walker, conferring on him, inter alia, powers as follows:—

“And in regard the said William Walker has already advanced considerable sums on my account, and for my behoof, and has also borrowed the sum of £1000 sterling from the trust-estate of my deceased father, Lieutenant-Colonel Patrick Walker, therefore I do hereby authorize and empower him either to take such security upon my said lands and estate for repayment of the said advances, or else to borrow such sum or sums of money as may be necessary for payment of the said debts, or for payment of any other debts or sums of money which he may hereafter pay for me, or advance on my account; and for which sum or sums so to be borrowed I hereby authorize and empower him to grant bonds or other securities, heritable or moveable, therefor, with interest, and under the usual penalties, and to bind and oblige me and my heirs, executors, and successors, in payment thereof; and particularly with power to the said William Walker, for me and in my name, to grant, subscribe, and deliver heritable bonds, or other rights and infeftments, for the said principal sums, penalties, and interest, upon my said lands of Clayton, containing all usual and necessary clauses, and which shall be as valid and sufficient for affecting and burdening the lands and others foresaid, and as binding upon me, my heirs and successors, as if the same were granted by myself.”

Lieutenant Walker was in the habit of making drafts on the defender, in favour of his creditors, which, in 1831, increased to such an extent that the defender refused any longer to accept them, being already about £600 in advance from his own funds on Lieutenant Walker's account. On the return of Lieutenant Walker to Scotland, in August, 1832, his debts in this country amounted to £2071. In September, he granted to the defender an heritable security for £660 over the lands of Clayton, which were already burdened with two bonds, each for £1000. On this bond the defender was duly infeft. In September, 1833, Lieutenant Walker granted a trust-disposition in favour of Mr Pearson, the pursuer, for behoof of his creditors, of the property of Clayton, which was soon thereafter sold for £3600. The trustee paid out of the price the two heritable bonds above-mentioned, but refused to pay the defender's bond for £660; and, along with Heath, the holder of two bills which the defender had refused to accept, raised a reduction of this bond on the statute 1621, c. 18, and also on the head of fraud at common law.

The defender denied that the bond under reduction was obtained by fraud, but maintained that it was granted for a just and onerous cause, and in fulfilment of the obligation contained in the factory of 1829.

The statutory ground of reduction was subsequently departed from, and the case went to trial on an issue as to fraud at common law:—

“It being admitted that the pursuer, Thomas Heath, is a creditor of Patrick Alexander Walker, and that the pursuer, Charles Pearson, is trustee appointed by the said Patrick Alexander Walker for his creditors and himself:

“It being also admitted, that, on the 3d day of September, 1832, the defender obtained from the said Patrick Alexander Walker the heritable bond No. 13 of process sought to be reduced, and the instrument of sasine following thereon, dated the 8th and recorded in the Particular Register of Sasines for the shire of Fife, the 10th days of the said month, also sought to be reduced:

“Whether, by undue or fraudulent concealment, or undue or fraudulent misrepresentation, the defender obtained a preference over the pursuers, or one or other of them, by means of the said bond and infeftment?”

Robertson, for the Pursuer, opened the case, and stated, that the defender, with the view of obtaining an illegal preference, had fraudulently elicited the security in question from Lieutenant Walker; and by misrepresentation of facts, and concealment of the real state of Walker's circumstances, had induced his other creditors, and especially the pursuer, Heath, to abstain from diligence against their debtor until after the defender's own security was safe from the operation of the act 1696, c. 5; that Lieutenant Walker was irretrievably insolvent at the date of granting the bond, and could therefore give no voluntary preference (Bell, II., 248); and that the defender concealed from the creditors the security granted to himself, which was for a prior debt, and a fraud upon the law (Ibid. 249).

The pursuer put in a letter, addressed by the defender to Lieutenant Walker, which bore reference to the deed of factory above-mentioned, and contained instructions for its execution.

Keay, for the Defender, suggested that the document referred to ought also to be produced by the pursuer, as necessary to explain the letter. The law was clear in the case of one letter which was an answer to another, and the same principle applied to any other document.

Dean of Faculty, for the Pursuer.—The terms of the letter are perfectly intelligible without the production of the deed of factory. The defender's object is to save himself from leading evidence, and make us prove his case.

The Court did not consider the production of the factory necessary for understanding the letter, and refused to cause the pursuer to put it in evidence.

A witness for the pursuer deponed to having discovered, from a search of incumbrances, that there were three heritable bonds over Lieutenant Walker's property.

Keay, on cross-examination, asked the witness by whom the bonds were subscribed.

Dean of Faculty.—You cannot prove the subscription of the bonds without producing them.

Keay.—The witness has already been interrogated as to the bonds, and I am only following up the questions.

The Court allowed the question.

When the pursuer had closed his case,

Keay, for the Defender, proposed to refer to the record for the terms of the obligation contained in the deed of factory already mentioned. The terms were quoted in the defender's statement of facts, and admitted by the pursuer. He wished to lay before the jury the opposite party's admission on the record, which is the best possible evidence. Since the passing of the statute, 1st and 2d William IV., abolishing the Jury Court, the record is held to be in Court, and may be referred to and read by either party, without being specially put in. Schnurmans, 18th July, 1832 (ante, X. 839); Ralston, same date (ibid. 848).

Dean of Faculty objected. The record is before the Court for the purpose of full explanation, but a party, instead of putting in a deed, cannot refer to a passage out of the deed quoted on the record. In the Jury Court, when the record was put in, a quotation from a deed contained in it had to be proved by other evidence. The record is not the best evidence of the document in question; and, if the defender refer to it for the sake of proving the terms of the document, the reading of the record to the jury to the effect proposed ought not to be allowed.